St. John Health System To Lay Off 2 To 3 Percent Of Workforce

Employees at a Green Country hospital are bracing for layoffs. St. John Health System is citing Governor Mary Fallin's decision not to participate in Medicaid expansion as the reason for the cuts.

An email was sent to everyone on staff at St. John Health System, saying the hospital is facing a challenging economic reality and that could end with 2 to 3 percent of its workforce being laid off.

The system employs more than 7,000, which boils down to between 140 and 210 layoffs.

St. John Health System President and CEO, David Pynn sent out an email to his employees, explaining that the number of patients seeking healthcare services there is decreasing.

In January, the federal government reduced Medicare payments to help pay for the expansion of the Medicaid program under the Affordable Care Act, but Oklahoma opted out.

The hospital says, it anticipates losing about $20 million annually in Medicaid reimbursement, plus another $15 million, due to other reimbursement reductions and federal cuts.

In the email, Pynn told employees, "With Medicare cuts already in place, and no Medicaid or other expansion of coverage on its way, St. John and other Oklahoma hospitals and physicians are faced with less revenue, but the same number of uninsured patients."

To add to the trouble, the hospital says Insure Oklahoma, a state-based program that helps the working poor purchase health insurance, may not be renewed.

After canceling a committee meeting to consider renewing the program Monday, Oklahoma House Speaker T.W. Shannon released a statement, saying, "I don't believe providing health insurance is a proper or efficient function of government. As conservatives, we should stand against such desires no matter where they come from, be it local or state government, federal bureaucrats or President Obama himself.

"I have no plans to continue a government-run insurance program that will cost $50 million to serve 9,000 Oklahomans. I simply do not believe it's the government's job."

Aides of Governor Fallin provided this response:

"Insure Oklahoma is a state-based program that helps the working poor purchase health insurance. It was developed by the Oklahoma Legislature with the support of Oklahoma voters. In 2004, Oklahomans voted to pass SQ 714, a ballot initiative that raised tobacco taxes and directed the revenue to fund Insure Oklahoma.

"If Speaker Shannon decides not to act, this popular, successful program will disappear. Most importantly, at least 9,000 Oklahomans will be stripped of their health insurance plans. I do not believe that is an outcome that any state leader can be happy about.

"If he is not interested in continuing this important program I encourage the Speaker to come forward with an alternative solution that prevents poor, working Oklahomans from being stripped of their health care plans."

4/1/2013 Related Story: Tulsa's St. John Health System Joins Ascension Health

The St. John email says the 200-plus jobs on the chopping block could be cut by the end of June.

In that email, employees were told if they are let go, they will get a severance package and priority placement when applying for open positions within the health system.

St. John Health System spokesperson Joy McGill gave News On 6 this statement Tuesday:

"St. John Health System faces a challenging economic reality, resulting from Oklahoma's decision not to participate in Medicaid expansion that would provide citizens access to health insurance through public funding.

"As of January 1, the federal government reduced Medicare payments to help pay for the expansion of the Medicaid program under the Affordable Care Act (ACA). Because Oklahoma will not be participating in the ACA's Medicaid expansion, our state essentially becomes a donor state. Oklahoma receives fewer federal healthcare dollars (which go elsewhere), while receiving none of the financial and social benefits of Medicaid expansion. The anticipated impact to St. John of this state decision is expected to be a loss approaching $20 million annually in Medicaid reimbursement for the healthcare services we provide. The Health System anticipates an additional loss approaching $15 million in reimbursements related to ACA Medicare payment reductions and federal sequestration cuts.

"To address this projected economic reality, St. John is reducing costs and restructuring its workforce to meet the anticipated reduced volumes and reimbursements for patients who seek our care. We will continue to look for ways to operate in this challenging environment while maintaining our commitment to providing high quality and personalized healthcare."

11/19/2012 Related Story: Oklahoma Governor Refuses Expansion Of SoonerCare